Fitbit posts $353M revenue in Q2, plans to launch smartwatch later this year

Once the market leader in wearables, Fitbit has recently struggled with fierce competition from companies such as Apple and China's Xiaomi.Reuters | August 03, 2017, 10:57 IST

Wearable device maker Fitbit reported a smaller-than-expected drop in quarterly revenue on Wednesday, and said it was on track to launch its much-awaited smartwatch for the holiday season.

Once the market leader in wearables, Fitbit has recently struggled with fierce competition from companies such as Apple and China's Xiaomi.

The company has blamed a shift among consumers toward higher feature devices and smartwatches for the declines in revenue.

The fitness-focused Apple Watch, with which Fitbit's devices compete, reported a 50% surge in sales in the iPhone maker's latest quarter.

Fitbit is stepping up efforts to reduce operating costs as it looks to turn around the business and has called 2017 "a transition year".

The company is on track to execute that plan, Chief Executive James Park said on a post-earnings call. The fitness-band maker's revenue fell nearly 40% to $353.3 million in the second quarter ended July 1, but came in above analysts' estimate of $341.6 million. The company posted a loss of $58.2 million compared with a profit of $6.3 million a year earlier.

Fitbit slightly narrowed its full-year revenue forecast to a range of $1.55 billion to $1.7 billion, from $1.5 billion to $1.7 billion it forecast previously.

"The second-quarter results give us more confidence that Fitbit can actually achieve its full-year guidance," said Wedbush analyst Alicia Reese, adding that an important factor would be the upcoming smartwatch.